SEBI’s new rule: Mutual funds will be able to re-invest in foreign stocks, SEBI approved

New Delhi: Markets regulator SEBI has re-approved mutual funds for investment in foreign stocks. However, the entire industry will be able to invest up to a maximum of Rs 7 billion (Rs 55,000 crore) in foreign stocks. The approval comes at a time when there has been a fall in the price of foreign shares. […]
 


SEBI’s new rule: Mutual funds will be able to re-invest in foreign stocks, SEBI approved

New Delhi: Markets regulator SEBI has re-approved mutual funds for investment in foreign stocks. However, the entire industry will be able to invest up to a maximum of Rs 7 billion (Rs 55,000 crore) in foreign stocks. The approval comes at a time when there has been a fall in the price of foreign shares. Edelweiss Mutual Fund has also started accepting investments in international schemes from Tuesday.

In early 2022, SEBI had asked mutual fund houses to ban fresh subscriptions in schemes to invest in foreign stocks. The ban was imposed as the mutual fund industry was crossing the Rs 7 billion (Rs 55,000 crore) mark for foreign investment. However, now that industry exposure has fallen below this limit due to a fall in international stocks, it has been re-approved. SEBI has set a limit of ₹7 billion for the mutual fund industry to invest in foreign stocks, while it has set a limit of ₹1 billion (Rs 7,800 crore) for investment in foreign ETFs.

SEBI has asked the Association of Mutual Funds in India (MFI), the regulatory body of the mutual fund sector, to ensure that every mutual fund can invest to the extent of foreign investment by the end of February 1, 2022. This means mutual funds can invest only in foreign stocks, until the February 1, 2022 limit is not exceeded.